FAFEN releases report on National Assembly completing first 100 days; PTI criticizes “anti-people budget†in the Senate
In Brief
ECONOMY
FM Aurangzeb presents budget, says it is “time for reforms”
On 12 June, Finance Minister Muhammed Aurangzeb presented the budget for the current fiscal year with a “longer and larger” IMF bailout package in mind. His presentation was done after PTI-SIC MNAs shouted slogans in favour of Imran Khan and against Prime Minister Shehbaz Sharif. The taxation measures unveiled included higher taxes on personal incomes and petroleum products, new taxes on real estate, and the withdrawal of several tax exemptions to generate additional revenues of more than PKR 2.2 trillion or 1.8 per cent of GDP in the next fiscal year. Even in non-tax revenue, petroleum products have been increased from PKR 60 to PKR 80 per litre as it is intended to yield 47 per cent annually. Aurangzeb stated: “Taking forward home-grown reforms, the government is negotiating an Extended Fund Facility with the IMF. Macroeconomic and fiscal stabilisation, building foreign exchange reserves, making debt sustainable and reforms in power and SOEs for improved transparency and governance would be focused during the new programme.”
Government expenditures will not reduce for next year, which was made evident as the budget showed an expansion in salary, pension, and development budgets. Aurangzeb announced a 25 per cent increase in salaries for government employees in grades one to 16, 20 per cent in grades 17-22, and 15 per cent for pensioners. The general sales tax collection is projected to increase by 36 per cent to PKR 4.9 trillion. Noting the difficulty in reducing the budget deficit, he said that the government would “increase incomes through a fair taxation policy and cut in unnecessary expenditure without compromising on human development, social and climate resilience.” To shift from a government-determined economy to a market-driven economy, the government would promote exports and mould the economic system through regulatory reforms and digitalization.
Though the salary exemption limit will stay the same, the government has proposed measures to taxable income that will impact salaried individuals and potentially raise an additional PKR 75 billion. The Finance Bill 2024 will double the tax rate for the salaried class of individuals between PKR 50,000 to PKR 100,000 per month, and this increase would see the tax rate increase from 2.5 per cent to five per cent. The bill proposed different tax measures for the purchase and selling of properties, which will vary according to the tax filer status. The bill also proposed a ten per cent sales tax on stationery and six per cent on the supply and import of plant machinery to tribal areas as well as electricity supplies to tribal areas on residential and commercial connections. Additionally, the customs duty will be imposed with 1,600 tariff lines. The customs duty exemption has been withdrawn on the import of fresh and dry fruits and hybrid cars.
Additionally, the government allocated 7.7 per cent of the Running of Civil Government (ROCG) and 15.3 per cent of Public Sector Development Programme (PSDP) funds for climate-sensitive areas to challenge climate change in the next financial year. Aurangzeb detailed that ROCG and PSDP will be bigger and the government plans to make sure the climate budget does not fall below eight per cent of the ROCG and 16 per cent of the PSDP. He stated that the government is looking forward to bringing economic diversification by introducing climate-resilient infrastructure and new industries. This aims to establish a greener economy and boost fiscal resilience.
(Rizwan Shehzad, “‘Lethal & poisonous’: PTI labels Budget 2024-25 as IMF-dictated,” The Express Tribune, 13 June 2024; Khaleeq Kiani, “BUDGET 2024-25: Aggressive taxation proposed to unlock IMF programme,” Dawn, 13 June 2024; Mubarak Zeb Khan, “Sweeping tax measures target salaried class, real estate and other assets,” Dawn, 13 June 2024; Nasir Iqbal, “Allocation for climate change to be ‘higher than last fiscal’,” Dawn, 13 June 2024)
POLITICS
FAFEN releases report on National Assembly completing first 100 days
On 12 June, The News International reported on a report published by the Free and Fair Election Network (Fafen) which highlighted that the National Assembly, which has completed its first 100 days, had a “slow-paced” performance “despite high attendance.” The report underlined that the assembly was focused on "parliamentary transparency and gender responsiveness," and pointed out the bipartisanship by the House which allocated nearly 54 per cent of the time used for points of order to the opposition. The report detailed that the lower house has conducted at least 23 sessions till now which spanned around over 66 hours and 33 minutes. The speaker and deputy speaker chaired 84 per cent of proceedings. Further, FAFEN observed that Prime Minister Shehbaz Sharif attended two sessions which accounts for ten per cent of his attendance. The report compared his percentage with Imran Khan’s 29 per cent in the first 100 days. It added that only the money bill has been approved in the first 100 days. On average, 230 members were present in one session and the House addressed 76 per cent of its business, including 20 legislative bills, 93 questions, 28 calling attention notices (CANs), and 11 resolutions. In addition, FAFEN emphasized that the NA demonstrated a gender-sensitive and responsive outlook towards female issues. (“NA's 100-day performance declared 'slow-paced',” The News International, 12 June 2024)
Finance minister delivers maiden budget presentation amid protests by SIC and PPP
On 13 June, the Sunni Ittehad Council (SIC) failed to derail the maiden budget presentation by the coalition government led by the PML-N. However, PPP’s eleventh-hour move delayed the proceedings for nearly two hours. PPP said its initial decision to boycott the budget session was mainly due to the alleged violation of the power sharing agreement it had with PML-N; however, after a last-minute intervention by Deputy Prime Minister Ishaq Dar where he assured the PPP its grievances would be addressed, the party agreed to have “token participation under protest.” PPP’s Vice President Sherry Rehman said that PPP, after a detailed negotiation, agreed to support the formation of the government for “larger national interest.” She stated: “Had we been taken on board; we would have been able to positively contribute to the government’s budget-making process.” Additionally, SIC members also staged a protest with placards and portraits of Imran Khan and kept raising slogans and desk-thumping throughout the finance minister’s budget speech. Later, some protestors staged a sit-in on the stairs. (Amir Wasim and Syed Irfan Raza, “Ruling party blindsided by PPP in maiden budget session,” Dawn, 13 June 2024)
PTI criticizes “anti-people budget” in the Senate
On 12 June, the PTI staged a protest against the “anti-people budget” in the Senate even before the beginning of the budget proposal for the 2024 to 2025 discussion. Opposition leader Syed Shibli Faraz criticized the tax proposals and said a levy of more taxes would add more misery for the people. He detailed: “Especially, when their mandate has not been accepted, we on behalf of the people of Pakistan, lodge our protest and condemn this high-handedness of the government where they are pushing the people against the wall.” He claimed that this was the worst economic scenario of the country in the last five decades and he alleged that this was due to “incompetence, bad handling, and misgovernance.” In response, Deputy Prime Minister Ishaq Dar stated that the proposals aimed to balance budget resources and revenues. He said the proposal would help increase the salaries of government employees. (Iftikhar A. Khan, “Budget 2024-25: PTI stages protest in Senate against new tax proposals,” Dawn, 13 June 2024)
SECURITY
Almost 181 terrorists were killed in the past 70 days
On 13 June, The Express Tribune reported that over the last 70 days, Pakistan’s armed forces killed a total of 181 terrorists as part of 7,745 operations conducted across various regions. In Khyber Pakhtunkhwa alone, 2,701 operations were carried out which killed 128 terrorists. In Balochistan, 51 terrorists were killed and in Sindh, 142 operations were conducted and two terrorists were neutralized. In May, 61 terrorists from KP and Balochistan were arrested. (“Over 181 terrorists killed in 70 days,” The Express Tribune, 13 June 2024)
Three people, including two ANF officials, killed during shootout
On 12 June, three people, including two officials from the Anti-Narcotics Force (ANF), died during an exchange of fire between ANF and smugglers near Tarkai Toll Plaza in Jhelum. An ANF spokesman confirmed this, saying the shootout occurred when the authorities asked a car to stop, but the car driver sped off. During the chase, the smugglers fired where Head Constable Gulzar and Lance Naik Mazar, and a civilian volunteer Zeeshan, lost their lives. The Punjab Forensic Science Agency (PFSA) team arrived at the spot to gather evidence. The police took the driver for investigation. Interior Minister Mohsin Naqvi expressed his condolences for the loss of lives and urged to bring the perpetrators of the incident to justice. (Mohammad Asghar, “Three, including two ANF officials, martyred during shootout with suspected smugglers,” Dawn, 13 June 2024)
PROVINCES
Sindh: Minister notes that Karachi receives only 50 per cent of its water requirements
On 12 June, during the Sindh Assembly session it emerged that nearly half of Karachi's population has to purchase water for daily use from different sources since "he gap in water supply and demand in the city is 50 per cent." Sindh Local Government Minister Saeed Ghani highlighted this situation in the house before sharing initiatives being planned by the PPP government to resolve the crisis. He explained that if the "six legal hydrants" in the city had not been operating, there "would be a huge water crisis" in Karachi. He assured that the "Sindh government is spending money out of its annual development programme to restore water supply from the Hub Dam canal," adding that the "development work will be completed in the next 12 months to ensure 150 million gallons of water supply daily." (Imran Ayub, "Karachi gets only 50pc of its water needs, minister tells PA," Dawn, 13 June 2024)
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Imran Riaz Khan, this is called Karma. You used to taunt politicians going for Hajj, the same is happening with you now. You were a propagandist; you are a propagandist and you will always remain a propagandist. No sympathies for hypocrites!
- Imran Khan
Talking about going with the finance minister will not do anything at the time when this conversation was going on, the roundup of our workers was going on. Houses are being vandalized, workers and their families are being kidnapped, fake FIRs are being filed, serious efforts need to be made to manage the state of the economy in the last two years. As far as today's budget is concerned, It is the budget of an unelected government, they have nothing to do with the people, while the elected representatives of the people are sitting in the opposition.
- Tehreek-e-Insaf
Imran Khan has asked to convey this message of Allama Iqbal to the nation again:
"The crime of weakness is punishable by death."
- Imran Khan
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Shahid Kardar, ‘Privatising power distribution’
Dawn, 13 June 2024
“To address the issues of the Discos, the news making the rounds is that the government is considering, yet again, privatising them as a way of improving service delivery and operational efficiencies and checking their financial haemorrhaging. This article argues that there are enough reasons to be less sanguine about the ability of the private sector and competition to provide affordable electricity to all. To begin with, clarity is required on what is being privatised. For instance, will the wire and pole infrastructure, a monopoly, be transferred? If not, then how is competition to be induced? Only increased competition can have a beneficial impact through better customer services and lower prices, say, by commissioning a system of several small entities operating in the same area sharing this network of infrastructure.”
Muneeb Shah, ‘Inside Pakistan’s oil smuggling paradox’
The Express Tribune, 13 June 2024
“The government’s narrative that “oil smuggling needs to be stopped as it threatens the local economy”, is disconnected from reality. In Pakistan, as well as in Balochistan and Iran, individuals respond to formal and informal incentives within socio-economic constraints. Not to forget, importing petroleum products significantly burdens Pakistan’s fragile economy, as these products account for over 30% of the country’s import bill. Taxes and margins add 35% to 45% to their original price, raising both the general price level and the demand for alternative fuel sources. It is pertinent to note that nearly one million people of Balochistan live within 50 km distance of the international border. The total number of households living within this distance is estimated to be 0.1 million. Up to 2 million people, known as kolbars, depend directly on this trade, using thousands of zamyads (vehicles) and khaiks (ships). This trade is ubiquitous in Balochistan, and border closures consequently leave millions jobless with no alternative viable income sources.”
Omar Quraishi, ‘The only way forward for the PTI’
The News International, 13 June 2024
“When former president Alvi made that statement, it didn’t really tie up with what the PTI and its leadership, including its incarcerated founder, had always been saying: that their struggle is for a democratic Pakistan and not for any personal gain or benefit. So it is good that finally, as reported by PTI stand-in chairman Barrister Gohar, Imran Khan has now formally (and finally) given the go-ahead to talk to other political parties. The Supreme Court had quite clearly told Imran Khan in recent hearings that it was in his party’s and the country’s own best interest if it talked to other political parties. And now that has been given the go-ahead. Of course, it goes without saying that had the PTI leadership had some sense and had its leadership some actual vision, they would have done this a long time ago. They would have realized and understood that a united front with all other political parties – including the PMLN and the PPP – was a win-win situation and would help advance democracy, not least because all of them had been done in hard at some point in time by the powers that be.”
Editorial, ‘Budget for stabilisation’
Dawn, 13 June 2024
“The additional tax measures and the proposed increase in the petroleum levy will help raise the tax-to-GDP ratio for next year to an estimated 11.5pc of the size of the economy from this year’s estimated 9.6pc. Another major goal of the budget is to produce a primary surplus of 1pc of the size of the economy to hold down its fiscal deficit to 6.8pc for debt sustainability. The deficit would be further slashed to 5.9pc provided the provinces also throw up a surplus of Rs1.2tr as envisaged in the budget. While the measures announced by Finance Minister Muhammad Aurangzeb are a step in the right direction, and seek to tax ‘sacred cows’ such as real estate investors, stock investors, exporters, the retail supply chain, and the like, these lack any “disruptive policy changes”, and represent incremental measures towards documentation of the economy.”
Editorial, ‘Budget 2024-25’
The News International, 13 June 2024
“The federal budget for the upcoming fiscal year can be deemed as cautiously optimistic. It is not aggressive, and it doesn’t try doing anything out of the ordinary either. The deepening of the existing taxpayer base continues, while little to no effort has been made in expanding the tax net, to include entities, and individuals that exist outside the tax net. Although the budget speech did mention very clearly a need to move from a consumption-oriented economy to an investment-oriented economy, it does little in explaining how that will be achieved. Finance Minister Muhammad Aurangzeb, who started some time behind the scheduled time, has however promised that this time the government hoped to implement the steps laid out in the budget. The delay in the session was caused by the PPP’s decision not to join the PML-N in parliament. This last-minute decision came on the basis of the lack of agreement on the PSDP, but a token representation from that party did finally take place in the House.”
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“The staleness of political slogans indicates a lack of creativity.”
-An opinion in Dawn, ‘Slog sloganeers’
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